WORLD TRADE  
ORGANIZATION  TN/RL/GEN/44 
13 May 2005 
 (05-1971) 
Negotiating Group on Rules Original:   English 
  
FURTHER SUBMISSION ON PROPOSALS ON 
PROCEEDINGS UNDER ARTICLE 9 
 
Paper from Chile;  Costa Rica;  Hong Kong, China;  Japan;  Korea, Rep. of;  Norway;  Switzerland;  
Separate Customs Territory of  Taiwan, Penghu, Kinmen, and Ma tsu;  Thailand;  and Turkey  
 
 The following communication, dated 10 May 2005, is being circulated at the request of the 
Delegations of Chile;  Costa Rica;  Hong Kong, China;  Japan;  Korea, Rep. of;  Norway;  
Switzerland;  Separate Customs Territory of Taiw an, Penghu, Kinmen, and Matsu;  Thailand;  and 
Turkey.  
 The submitting delegations have requested th at this paper, which was submitted to the 
Rules Negotiating Group as an informal document (JOB (05)/80), also be circulated as a formal 
document.  
_______________ 
  
 This paper elaborates upon some of the issues  raised in documents TN/RL/W/83, JOB(04)/59 
and TN/RL/GEN/10 with a focus on paragraphs 3 and 5 of Article 9.  This paper does not address all 
proposals that were contained in the documents cited above, nor all the proposals related to Article 9.  
We reserve the right to submit further elabor ation on the other proposals of the documents.  
Furthermore, the proposed amendments to the Anti-Dumping Agreement  do not represent a final 
position and may be subject to further addition, modification, and/or deletion in the course of 
negotiations.  Other provisions in the Agreem ent that might be affected by these proposed 
amendments may well be examined in the later st ages of negotiations when Members have a more 
comprehensive picture of the amended Agreement.  Proposed Amendment: 
 
1. Applicability of Article 2 to reviews under Article 9 
 Add a new paragraph to Article 9 as follows: 
 
9.6  The provisions of Article 2 shall a pply to all determinations pursuant to 
paragraphs 3 and 5 of this Article.  The authorities shall normally use the same  
methodologies consistently in  determining a margin of dumping in an investigation 
initiated pursuant to Article 5 and in s ubsequent determinations pursuant to 
paragraph 3.  If the authorities use a different methodology, the parties concerned 
shall be provided with opportunities to ma ke comments, and a full explanation shall 
be given why such different methodology was used .1 
 
                                                      
1 This proposed text is without prejudice to legal draf ting of disciplines that involve the right to make 
comments, disclosure and public notices. TN/RL/GEN/44 
Page 2  
 
 2. Applicability of Article 6 to reviews under Article 9 
 Add a new paragraph to Article 9 as follows: 
 
9.7  The provisions of Article 6 shall a pply to all determinations pursuant to 
paragraphs 3 and 5 of this Article.  
3. Relevance of Article 5 to reviews under Articles 9 
 (Period of proceeding) 
  Add a new clause to Article 9.5 as follows:   
9.5 ... Such a review shall be initiated and carried out on an accelerated basis, 
compared to normal duty assessment and review proceedings in the importing Member, and completed within 9 months of the request for the review.  An extension 
of up to 3 months may be granted upon th e request of the exporters or producers … 
 ( De minimis  margins of dumping) 
 
 Add a new sentence to Article 9.3 as follows:   
9.3  …For the purpose of this paragraph,  de minimis margins of dumping as defined 
in paragraph 8 of Article 5 shall be treated as zero margins of dumping.  
 Also, add a new sentence to Article 9.5 as follows: 
 
9.5  …The provision of paragraph 8 of Ar ticle 5 regarding de minimis margins of 
dumping shall apply to reviews ca rried out under this paragraph.  
Explanations: 
 
 Reviews under Article 9 provide mechanisms to  determine the level of AD duties reflecting 
actual behaviour of exporters. “It is crucial that efforts made by exporters who eliminate dumping in 
response to AD measures are duly recognized. This is  also the best way to eliminate the injurious 
effects of dumping on the importing country. However, the application of these rules by some Members has made it difficult to change […] th e measures irrespective of the efforts made by 
exporters to eliminate dumping.”
2  We believe that the lack of explicit rules on reviews may lead to 
arbitrary application of rules, procedures, and me thodologies in reviews that differ substantially from 
those in original investigations. In light of above, the FANs have taken the position that there must be 
clear and objective rules applicable to reviews.  
  The main thrust of our previous submissions was to state the general principle that the rules in 
Articles 2 to 6
 3 governing original investigations should be applied to other anti-dumping proceedings 
as well.  Our proposal was not about strictly appl ying the exact same rules in every aspect.  It is 
recognized that reviews and other proceedings are di stinct processes from the original investigations 
in that they have different purposes and natures.  The applicability of the basic rules varies according 
to the nature of the proceeding in one dimension and the provisions of Articles 2 to 6 in the other 
dimension.  Given its frequent use and enormous impact, there may be merit in further clarifying and 
                                                      
2 TN/RL/W/171 of 15 February 2005 (Senior officials’ statement by the FANs). 
3 While transparency provisions in Article12 should be  also applicable to Article 9 reviews, this topic 
may be tackled separately in the context of transparency issues.  TN/RL/GEN/44 
 Page 3 
 
 
 deepening the discussion on Article 9.  Specifically, this proposal is intended both to confirm the 
applicability of Articles 2 and 6 to Articles 9.3 a nd 9.5 reviews and to clarify where necessary the 
procedural and substantive standa rds applicable to these reviews. 
 Proposal 1:  Applicability of Article 2
 
 
 Given that the nature of Article 9 proceedings  is to determine the actual margin of dumping 
and the level of the AD duties payable, the same substantive and procedural standards should be 
applied in reviews as in original investigations, in  particular the rules governing the determination of 
the margin of dumping under Article 2.  Under Arti cle 9.3.1 the authorities determine the definitive 
level of AD duties and apply the margins of dumping found in a review retroactively to all imports 
subject to review.  In addition, these reviews es tablish the cash deposit rates required as security for 
the eventual definitive duties fo r the subsequent period.  Artic le 9.3.2 reviews establish the 
entitlement of an importer to a refund of any excess duties paid.  Finally, Article 9.5 reviews permit new shippers to establish an individual rate for AD duties.  As in an original investigation, the 
authorities calculate and determine the margins of dumping in each of these types of reviews. 
  In view of such common objective of establishing the “constituent elements” of dumping, there is no apparent rationale for au thorities to apply a different subs tantive standard in these Article 9 
reviews than is applied in the original investigati ons.   In both original i nvestigations and reviews, 
authorities calculate dumping margins to determine what action they can take against dumping.  In 
each case, “specific action against dumping” can on ly be taken “when the constituent elements of 
‘dumping’ are present.”
4   
  Furthermore, since there is no definition of dumping elsewhere in the Agreement and 
Article 2 is the only place in the Agreement where the methodology to determine dumping is 
articulated, it is essential that the definition a nd methodologies provided in Ar ticle 2 be applied in 
determining the duties to be imposed, the collection of duties, reimbursement, refund or other changes 
in the duty amounts under Article 9.3.   Unless the definitions and methodologies of Ar ticle 2 are required to apply in reviews under 
Article 9.3, authorities cannot ensure that the am ount of the duty does not exceed the margin of 
dumping as established under Article 2.  Moreover, gi ven that the level of the AD duties may increase 
due to Article 9.3.1 reviews compared with the level set in final determinations in original 
investigations, the amount of the anti-dumping duty based on the reviews could exceed the margin of dumping as established under Article 2 if Article 2 di d not apply to these reviews. That would result 
in violation of Article 9.3. This interpretation is  also consistent with the introductory clause of 
Article 2, i.e., “[f]or the purposes of this Agreement” and th is proposal is intended to clarify what the 
current ADA already implies.  Therefore, we belie ve that all provisions of Article 2 that have a 
bearing on the dumping margin apply to the estab lishment of dumping margin under Article 9.3. 
  Article 9.5 also does not make it clear that  so-called “new shipper” reviews should be 
conducted in accordance with the provisions of Artic le 2.  However, there is no reason that new 
shipper reviews should be conducted using a di fferent definition of dumping and different 
methodologies than those required under Article 2.  In  fact, such reviews are substitutes for the initial 
investigation for producers and exporters that ha d not exported during the period of the original 
investigation and that are not related to any of  the exporters or producers subject to AD measures 
precedent to the new shipper reviews. 
  Additionally, authorities must apply consiste nt methodologies in determining the margin of 
dumping.  For example, assume that an authority in an original investigation calculated a dumping 
                                                     
 
4 See Appellate Body Report, United States – Anti-Dumping Act of 1916 , para. 122. TN/RL/GEN/44 
Page 4  
 
 margin on the basis of a comparison of a weighted average normal value with a weighted average of 
prices of all comparable export transactions. The ADA does not clearly state whether the authority 
may use a different Article 2 comparison method (e.g. transaction-to-transaction method) in reviews.  If the authority has full discretion to arbitrarily change its methodology for establishing the dumping 
margin between the original investigation and s ubsequent reviews, even if both methodologies are 
permitted under Article 2, that woul d undermine the predictability for exporters who make the effort 
to eliminate dumping.  The same is true with regard to the model matching methodology used by 
authorities in the context of the “fair comparison” for Article 2.4.  If an authority is free to change the 
model matching criteria at will, the changes ma y impose significant burdens on the exporters, and 
seriously undermine predictability for them.  Ther efore, we believe that the authorities should be 
required to use the same dumping margin calculatio n methodologies in reviews that were used in 
original investigations (or in prior reviews), abse nt changes in factual circumstances, decisions of 
domestic court or requirement by the DSB that ma ke it necessary to change the methodology.  For 
example, assume that an exporter sold directly to  unrelated customers in the importing country in the 
investigation, and the authorities treated these sal es as “export price” sales.  The exporter then 
changed to selling via a related impor ter in the period of review.  In such a case, the authority could 
be justified in changing to a “cons tructed export price” methodology in  the review, provided of course 
that the requirements of Article 2.3 are met.  In this case, however, the authority must seek comments 
from the parties concerned and provide a full explanation on the changes made.
 5 
 
Proposal 2:  Applicability of Article 6  
 
 Currently, Article 9 does not explicitly state that  the provisions of Article 6 are applicable to 
reviews under Article 9.  This appears to be an oversight, because Article 11 specifically renders the 
provisions of Article 6 applicable to any reviews carried out under Article 11.  The evidentiary and 
procedural safeguards of Article 6 are essential to ensuring an adequate opportunity for parties to 
submit evidence and to provide the protections of due process.  There is no reason that these same 
safeguards should not be applicable to reviews under Article 9.  
Proposal 3:  Relevance of Article 5
 
 
 In relation to the subjects that Article 5 deals with, the FANs propose clarifications on 
two issues. 
  First, the FANs propose that new shipper reviews be completed within 9 months.  As they involve a very small number of exporters or producer s, these reviews merit a particularly short period 
of investigation.  Even though the current Agre ement already requires an  accelerated process for 
Article 9.5 reviews, it does not provide for a numerical indication as to their duration, unlike 
Articles 5.10, 9.3.1, 9.3.2, and 11.4 do
6.   
  Second, the FANs believe that the de minimis  margin in Article 5.8 is applicable to 
investigations as well as to reviews.  There is no reason why de minimis  margins should be treated 
differently during these distinct, but closely inte r-related, phases of an anti-dumping proceeding that 
always concerns the same product and the same e xporter/producer.  At the review stage, authorities 
should, therefore, not be entitled to take “specific  action against dumping” that is ruled out at the 
investigation stage.  At both stages, the impact of de minimis  margins on the domestic industry is 
                                                     
 
5 The FANs suggested in this paper a transparency  provision for this purpose, and may consider to 
propose, in the course of negotiations, to expand this type of discipline on procedural fairness and transparency 
to a broader context of the Agreement, inter alia , to other provisions that contain the word ‘normally’. ( see also 
item 1 of the proposed amendment and footnote 1. ) 
6 These provisions on the duration of various AD proceedings might be revisited in the course of 
negotiations.  TN/RL/GEN/44 
 Page 5 
 
 
 exactly the same: it does not cause injury.  An exporter with a de minimis  margin during the 
investigation is not subject to AD duties, yet an exporter with an identical level of dumping margin in 
a review is subject to duties.  The Agreement s hould not allow such arbitrary treatment. 
  Under Article 9.3.1 reviews, definitive duties are not collected on imports during the period of 
review, rather “[i]mports after the imposition of the AD measures woul d be subject to a cash deposit 
guaranteeing potential payment of definitive duties.”
 7 That is, the definitive duties are determined by 
authorities in reviews pursuant to Article 9.3.  The importing Member should not collect de minimis 
margins, which cannot be causing injury to an industry in an importing country and are within the “margin of error.”
 8  In addition, in a retrospective system, the (new) cash deposit rate determined in 
the context of a review conducted under Article 9.3.1 has exactly the same effect as the cash deposit 
rate that the authorities determine in the original investigation.  Thus, de minimis  margins of dumping 
must be treated as zero in establishing duty deposit rates under Article 9.3.1 reviews.    Equally, under Article 9.3.2 review, if the or iginal duty rate was 5 per cent and the dumping 
margin at the re-assessment is 1.5%, the exporter should be refunded the full 5 per cent, and not just 
the 3.5 per cent difference.  An exporter that has reduced dumping to de minimis  levels should be 
treated like an exporter that has been found, in an investigation, to be dumping at de minimis levels, 
because neither is causing injury.  In none of these situations should the authorities collect de minimis  
margins, which are not causing injury.  For all the purposes of the anti-dumping system, the 
de minimis  rule should be able to prevent the impos ition of duties where there is minimal dumping 
and duties are not warranted.
9 
  Article 9.5 reviews allow exporters or producer s that did not export the product subject to the 
AD duties during the period of the original investiga tion and that are not related to exporters subject 
to AD duties of the product to request a review to determine an individual AD duty rate.  The reviews 
work as substitutes for the initial i nvestigation for a “new shipper” that did not export during the 
period of the original investigation and that is not related to any of the exporters or producers subject 
to AD measures.  Therefore, there is no reason the same effect of de minimis  in Article 5.8 should not 
be applicable to reviews under Article 9.5.  
__________ 
 
 
                                                     
 
7 Czako, Judith et al. “A Handbook on Anti-Dumping Investigations.” p93 
8 The level of  de minimis  margins of dumping  in reviews under Article 9 should link with the 
de minimis threshold in Article 5.8.  We will further elaborate on the appropriate level to which the de minimis  
threshold should be raised, giving particular consideration to the developmental needs of developing countries, 
particularly LDCs, whose exports are particularly vulnerable to the imposition of AD measures by other 
members (see JOB(05)/10/Rev.1). 
9 This does not mean that the AD duty must be immediately terminated by the result of the duty 
assessment pursuant to Article 9.3 in the cases where the margin is de minimis  as provided for in Article 5.8.